Vitalik Buterin: Large holders of control tokens are dangerous for the crypto industry

Ethereum co-founder opposes traders speculating and hoarding crypto project management tokens.

Vitalik Buterin, co-founder of the project who first launched smart contracts, is ambivalent about project management tokens. According to him, the ability to manage the development of a crypto project using tokens does not make these coins valuable:

“It's like you're saying to yourself, 'I'm buying X dollars because later someone might buy it from me or from other investors to skew the protocol to suit their interests.'”

Buterin believes that the average investor is not ready to “pay $500 for a 0.0001% chance to influence the results of some votes.”. It's not a good deal. On the other hand, for multi-millionaires and hedge funds, which may include attackers manipulating the market in their own interests, this deal promises considerable profit, the Ethereum co-founder believes.

Buterin is concerned that governance tokens are being hoarded or traded for profit. In addition, large organizations often buy governance tokens in order to effectively control protocols.. And this is contrary to the principle of decentralization. The Ethereum co-founder is strongly against speculation on the alleged future value of the governance token.

In Ethereum, governance coins are a type of ERC-20 token that is issued by a decentralized community to vote on various proposals.. The more tokens, the more voting rights.

Recently, Vitalik Buterin stated that the collapse of FTX confirmed the stability of DeFi protocols.